The end of the Cold War

The cold war was an economic competition between the East and the West. Both superpowers:

Needed a large military budget to finance the development and production of arms to compete in the arms race.

Competed to offer aid to other countries and in so doing to win allies.

It was clear the Soviet Union no longer had the economic power to compete with the US.

Economic Performance

US economy more robust than the Soviets.

At the end of WW2 the US had the largest economy.

There were recessions but these prompted innovation and new growth.

Economic freedom was the key to the economic resilience of the US.

The USs economy was large than the Warsaw Pacts economies put together.

The Soviet command economy was created in the 1930s.

It was the fastest growing after WW2. It was able to produce large qualities of raw materials.

But growth declined from 1930s to 1980s.

First, although the Soviets had could produce large quantities of goods, they were to a very low quality. Secondly, the Soviet economy was unable to produce sophisticated high tech goods.

The command economy had less incentive to innovate and by 1945, raw materials were declining.

Reasons for Soviet Stagnation

The Soviets were subsidising the Eastern bloc. Amounted to $80 billion throughout the 1970s, created huge economic strain.

The Soviet Union limited the availability of high tech goods as they feared it would aid political opposition groups. Thus absence made the economy less efficient.

25% of GNP was spent on military. This meant less money was invested in project designed to stimulate economic growth.

After Chernobyl, it was clear technology in Russia was downhill and need improvements.

Key interpretation: Some historians arguing the end of the Cold war was due to the worsening of the Soviet economy. Soviet leaders were forced to negotiate with the US on arms control as the Soviet economy could not support the high level of military spending. Soviet economy caused soviet leaders to act…it was not necessarily a choice.

Ronald Reagan

Uncompromising anti-communist. “Moral of evil communism”. He referred to the Soviet Union as an Evil Empire and stressed the importance of restoring US strength and pride.

He embarked on the largest peacetime military build-up in US history. He spent 30% of the federal budget on the military. There were new missiles: the Trident and the stealth bomber. Congress supported this because they had public support, needed to unaffiliated with Iran and needed to stock up after Vietnam. Defence spending over 8% in 2 years.

The Reagan Doctrine affirmed the USs willingness to assist anti-communist groups in regions where Soviet infiltration had taken place. Wanted to halt the growth of the USSR in 3rd worlds and put their economies under more strain as they had to send more support. E.g. in Afghanistan, by 87, the US was providing aid to the Mujahedin to fight Soviet backed Afghan government, by…